Asean Gas Grid brings opportunity to Premier

Dow Jones reported ASEAN's gas grid plan is "taking shape," offering promising opportunities for upstream players like the U.K.'s Premier Oil PLC (PMOIY), Chief Executive Charles Jamieson this week.

According to Dow Jones, the company's CEO Charles Jamieson said the gas grid project - to link via pipeline natural gas producing and consuming nations in Asia - will move a step closer to fruition when the first supplies of Indonesian natural gas arrive in Singapore early next year.

Primarily an upstream company, Premier is also interested in taking stakes in associated pipelines as gas fields in Asia are developed, Jamieson said.

A case in point is the pipeline that will carry gas from Indonesia's West Natuna Sea to Singapore. Premier holds a stake in the pipeline, as well as in upstream gas development for the project.

Premier's latest contribution to Asean's gas grid takes the form of a gas export platform under construction in Batam, Indonesia, for use in the West Natuna Sea, Jamieson said.

The platform will be ready in May 2001 in time for Premier's 22-year contract to supply gas to Singapore's Sembawang Gas Corp., starting July 2001.

First gas is expected to arrive from West Natuna "within the next two to three months," Jamieson said. It will travel along a 400-mile subsea pipeline from adjacent gas fields operated by Premier, Gulf Oil L.P. (X.GOL), and Conoco Inc. (COCA).

He further said upcoming projects for Premier include Pakistan's Bhit field, slated to come onstream in late-2002, and recent offshore finds in Indonesia.

Bhit Joint Venture, in which Premier and the Royal Dutch/Shell Group (RD) jointly hold a 40% share, recently signed a gas sales agreement with Sui Southern Gas Co. Ltd. (C.SSG). Other partners are field operator Lasmo PLC (LSO), with 40%, and Oil & Gas Development Corp. Ltd., with 20%.

Gas production from the Bhit field is expected to plateau at 235 million standard cubic feet in early 2003. The first phase of development will cost an estimated US$260 million, Premier said.

East Java is a primary area of focus for Premier, Jamieson added. Premier plans two appraisal wells - one at its 1998 Ujung Pangkah oil and gas discovery; the other, slated for 2001, at its Sidayu oil discovery, announced in November.

Both are in the Pangkah block, operated by Premier with a 40% stake. Partners are Amerada Hess Corp. (AHC) with 36%, and Gulf and Dana Petroleum PLC (U.DNX), each with 12%. (*)